Nomination in epf 1952 for unmarried males

24 December 2012I am a member of the Employees Provident Fund and have been voluntarily contributing 100% of my basic salary (Rs.6,500/- per month) for the last several years and have been able to save a significant amount in my EPF account as part of my retirement planning.

I am not married and do not intend to get married or raise a family. Hence, I have nominated my younger sister to be the beneficiary of my EPF corpus in case of my death.

I have just come across 2 clauses in the EPF scheme which has me worried:

1)"If a member has a family at the time of making a nomination, the nomination shall be in favour of one or more persons belonging to his family. Any nomination made by such member in favour of a person not belonging to his family shall be invalid."

2)"a family” means— (i) in the case of a male member, his wife, his children, whether married or unmarried, his dependant parents and his deceased son’s widow and children."

My queries are:

a)whether, after reading these two clauses, my sister's appointment as my nominee is legal and valid since I have no "family" as defined in point 2 given above,

b)that the entire amount(corpus) in my EPF account will be handed over to my sister without any undue complications in the eventuality of my death,

c)can I also appoint my brother or nephew or cousin as my nominee as long as I am not married and do not have a "family" as defined in point 2 above?

24 December 2012According to law, a nominee is a trustee not the owner of the assets. In other words, he is only a caretaker of your assets. The nominee will only hold your money/asset as a trustee and will be legally bound to transfer it to the legal heirs. For most investments, a legal heir is entitled to the deceased’s assets. For instance, Section 39 of the Insurance Act says the appointed nominee will be paid, though he may not be the legal heir. The nominee, in turn, is supposed to hold the proceeds in trust and the legal heir can claim the money.

A legal heir will be the one whose is mentioned in the will. However, if a will is not made, then the legal heirs of the assets are decided according to the succession laws, where the structure is predefined on who gets how much. For example, if a man during his lifetime executes a will. In the will, he mentions his wife and children as legal heirs, then after his death, his wife and children are the legal owners of his assets. It is essential that one needs to execute a will. It is the ultimate source of truth and replaces the succession law. Nominee can also be one of the legal heirs.

If the brother is having ancestral property in his possession, than the sister can claim her share only and only from that part of the property which is ancestral.

If the brother has earned and made any property himself than the sister has no right to claim partition.

In India and in Hindu sister can claim her brother's property if first category heirs isn't available. sister sit on 2nd category so she can legally claim.